Blog series – Giles Cuthbert

In advance of our event at the Bank of England on 21 March 2017, we asked interested parties to write on the theme: Worthy of trust? Law, ethics and culture in banking…

Law creates the framework within banking operates, it provides banks with the protections they need to flourish in a modern mercantile environment. Society benefits from this, the social purpose of banking enhances the society we live in, allowing businesses to thrive and individuals to prosper.

However, the law by itself will not always be effective in affecting the behaviour of bankers, and indeed we do not want our bankers simply to follow the letter of the law. We want our bankers to be professionals who take wise, prudent decisions.

In terms of ethics, what do we hope for from our bankers – I would reiterate that if we simply expect them to follow rules and guidelines then we will never succeed in creating a culture where thoughtful stewardship lies at the forefront of a banker’s mind. Rather we will create an environment whereby we have bankers who strive to follow rules, but will not develop ways of ethical thinking, and ethical awareness. They will simply wait until a legal issue hits them, or perhaps deal with other ethical challenges from the perspective of risk management.

Culture cannot simply be viewed as a feature of one organisation. For the culture of an organisation is formed in part by the society and world in which we all live. We do, therefore, to a certain extent, get the cultures which we desire. We may think otherwise, but it is our demands and requirements as a society which drive the behaviours in banks and other organisations. We need to be thoughtful as consumers, investors, regulators and stakeholders as to what behaviours we are really driving. Are our actions likely to create the organisational cultures we really want.

So what is the solution? We need bankers who are thoughtful professionals, who work within the framework of law, regulation and codes of conduct. We also need bankers to feel proud of their

professional approach, and their contribution to a socially purposeful industry – to their profession. Critically, however, they must be knowledgeable professionals who bring their professional judgement to bear on ethical dilemmas. Only then will they be able to deliver trustworthy ethical banking with a social purpose. Without knowledge, ethics and professionalism a banker is not be worthy of our trust.

I would argue that it is integrity that pulls all this together – integrity reflects a notion of wholeness, that we are consistent in our actions and ethics whether at home or at work; in our private life or our public life. If we start developing different codes for ourselves in different spheres then we have to ask whether we are acting with integrity. Of course the behaviours need to vary – but the ethics which drive those behaviours do not – so the way I may show compassion to my child will be very different from the way I demonstrate compassion to a colleague- but the ethical value of compassion will remain unchanged.

Trust is given to those who show integrity; and it is integrity that leads us to support a healthy culture and a respect for the law, alongside a virtuous approach to ethics.